Companies

Volvo Cars bullish on India’s long-term potential

Nandana James Mumbai | Updated on May 19, 2019 Published on May 19, 2019

Charles Frump, MD   -  Bijoy Ghosh

In its quest to fuel growth in India, Volvo Cars is betting on electric and hybrid vehicles, which it sees as game changers.

The Swedish luxury car-maker clocked 30 per cent year-on-year growth in 2018, selling 2,638 units — primarily led by the XC60 and new XC40 SUVs — at a time when the luxury car market reported only a 3 per cent year-on-year rise in volumes. This has already made India its fastest growing market.

“In a market that is really hungry for luxury SUVs, I feel we have the best luxury SUVs, which is fantastic, and I think that really has propelled our growth,” Charles Frump, Managing Director, Volvo Cars India, told BusinessLine.

Frump said that the growth in India is primarily driven by offerings such as the Volvo XC60, which won the World Car of the Year distinction, a first for the company.

The company’s growth in the country is also driven by its robust dealership network. It currently has 26 outlets in India. Volvo has also been focussing on tier-2 cities. Though the company is open to expanding its dealership network further, its primary focus is on ensuring the profitability of its dealers.

The government policy on electric cars has been laid out very clearly, Frump said, but added that it should be made long-term and stable so that the industry could increase its efficiency. Frump also suggested reducing tax on plug-in hybrid electric vehicles (PHEV), as they can run approximately 40 km a day on electricity charge as a full electric car. Currently, hybrid cars attract a tax of around 43 per cent.

Shift from diesel

As for the BS-VI emission norms, which will come into play by the next financial year, he said that there would be a reduced focus on diesel variants, going forward. “In the very end, we will have only electrified cars. But, there will be a shift from diesel to petrol prior to that.”

The auto sector is also going through a slowdown, with sales plummeting across all segments in April. Asked about the impact on Volvo Cars, he said the company has been able to weather the trend.

Frump said that while factors such as credit tightening, the elections and the uncertainties regarding the new government and its policies may have dampened sentiments, the overall potential remains intact. “I think it’s important to keep our eye on the ball for the long term, (instead of) worrying about some of these blips.”

Published on May 19, 2019
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